A REGULAR MEETING OF THE PUBLIC UTILITIES COMMISSION OF THE CITY OF VIRGINIA, MINNESOTA WAS HELD AT THE OFFICE OF THE DEPARTMENT OF PUBLIC UTILITIES ON monDAY, MAY 18, 2009, AT 4:30 P.M.

Commission President Bloomquist called the meeting to order at 4:30 p.m.

Present: Commissioners Bloomquist, Lucarelli, Petroskey, Raukar, and Marks.

Absent: None

Also Present: Terry Leoni – General Manager; Sue Lalli – Public relations / Customer Service Supervisor; Bill Hafdahl – Director – Finance and Administration; Dennis Lindberg and Charles Baribeau – Virginia City Councilors; Josh and Courtney Logan – Customers; Unknown Woman – did not sign in; Chuck Ramsey, MDN; representatives of Virginia City Cable Commission for purpose of taping the meeting

Commission President Bloomquist thanked General Manager Leoni and expressed the gratitude of the Commission for the hard work and leadership he has provided the Utility. The past few years have been very busy and Mr. Leoni has proven to be a strong leading force for the Utility.

Customers Josh and Courtney Logan addressed the Commission regarding an adjustment made to their utility billings as a result of a malfunctioning electric meter. Mr. Leoni gave a recap of the events leading to the adjustment and the meetings held with Mr. Logan. After a very thorough review, the Utility had reduced the original adjustment calculated. The final adjusted amount covering the period June 2008 through April 2009 was $1,664.46. The Utility also offered to review the adjustment after one year when actual consumption on a properly functioning electric meter would be available for usage comparison. Mr. Logan addressed the Commission regarding the amount of the adjustment and also the rude treatment he felt he received from members of the Utility management staff. At this point a public apology was given by Mr. Hafdahl for any rudeness on his part. After a full presentation of the events involved by Mr. Logan and his concern that other customers not receive the same treatment, it was moved by Lucarelli and supported by Petroskey that the adjustment to Mr. Logan’s account remain at $1,664.46 and the Utility, pursuant to the Utility’s letter dated May 8, 2009, review the electrical consumption on the account after one year’s time should Mr. Logan request this be done. Motion carried.

Moved by Lucarelli and supported by Petroskey that financial Resolution #5140 authorizing the payroll dated May 7, 2009 in the amount of $99,215.74, checks #46173 through #46194, and direct deposits #13437 through #13491; and bills dated April 27, 2009 through May 18, 2009 in the amount of $811,814.37, checks #81301 through #81404, and wire and electronic transfers in the amount of $908,862.04 and the minutes of the April 27, 2009 meeting be approved as presented. Motion carried.

Mr. Leoni noted the next meeting of LEA would be held on Tuesday, May 19, 2009 at 4:45 p.m. at the Hibbing Minnesota Public Utilities. Minutes from the April 27, 2009 meeting and LEA cash flow reports were in all Commissioners’ packets. Two contracts to cover the purchase of wood for approximately 35,000 tons of biomass would be presented for approval at the LEA meeting. Both the Hibbing and Virginia Plants are performing well and State legislation was passed to adjust the Agreement with Xcel Energy. This legislation will have to go before the Minnesota State Public Utility Commission to receive approval and make Contract changes. Mr. Leoni reported the Virginia biomass boiler will be down for annual maintenance December 2009 through January 2010.

The April 2009 Monthly Injury Summary Report was reviewed. The accident/incident shown on the report was reviewed and there was no lost time during the April 2009 time period. Mr. Leoni reported the Director of HR and Safety was working with the City to ensure no Utility employees are put into an unsafe position while performing their duties.

Carried Forward

City of Virginia page 2

Department of Public Utilities

Commission Meeting Minutes

May 18, 2009

Brought Forward

General Manager Leoni reported again that AFSCME had turned down the last contract proposal at their union meeting held on March 11, 2009 and nothing has been heard with regard to continuing Contract Negotiations. The Commission will be kept advised as negotiations progress.

Mr. Hafdahl reported on the Minnesota Municipal Gas Association meeting held earlier this month. Due to the current condition of the market, nothing further has been done regarding the pre-purchase of natural gas. The Association will continue to monitor market conditions to ensure action is taken on items that will save customers costs for natural gas. Discussions were held on the MMUA Natural Gas Circuit Rider Program, joint purchase of natural gas, sharing pipeline reservations, etc., with no action being taken to move forward on any of these programs.

Mr. Hafdahl covered the Utility’s transition to two-cycle utility billings. A notice will be mailed to all customers along with the billings going out the first week of June 2009 and the next issue of the Customer Newsletter will detail the changes to begin July 1, 2009. After discussion it was moved by Petroskey and supported by Raukar to authorize management to move forward with the change to two-cycle utility billings. Motion carried.

Mr. Leoni noted the April 30, 2009 financials reflect the effect of the Department taking aggressive steps to keep all costs as low as possible.

There being no further business to come before the Commission, Commission President Bloomquist declared the meeting adjourned at 5:27 p.m.

ATTEST: APPROVED:

____________________________ ____________________________

Matt Raukar, Secretary Quentin Bloomquist, President